A Big Federal Victory for Level 3?

January 11th, 2012 by · 13 Comments

While there hasn't been a PR on the subject yet, a helpful reader came across this little item detailing a 10 year DISA/DITCO contract worth up to $410.8M apparently won by Level 3 Communications (NYSE:LVLT, news, filings) over the holidays:

DEFENSE INFORMATION SYSTEMS AGENCY

On Dec. 29, 2011, Level 3 Communications, L.L.C., Broomfield, Colo., was awarded an indefinite-delivery/indefinite-quantity contract not-to-exceed $410,848,162 million dollars for fiber cable operations and maintenance support. The period of performance is 10 consecutive years, with one-year options through Dec. 29, 2021. Performance will be at various locations throughout the United States. The solicitation was issued as an other than full and open competitive action pursuant to 10 U.S.C. 2304(c)(1). Level 3 Communications is a large business. The Defense Information Technology Contracting Organization, National Capital Region is the contracting activity (HC1047-12-D-0002).

The source is this article on Defence Professionals.  And while $410M would be the theoretical maximum and not any sort of guarantee, it's not often we see a nine-digit federal bandwidth deal in the hands of someone other than Verizon, AT&T, Sprint, or CenturyLink/Qwest.  Winning it would be a heck of a way to have closed out 2011.

Hopefully more details will emerge.

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Categories: Government Regulations · Internet Backbones

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13 Comments So Far


  • toddforthree says:

    rob, this appears to be a dark fiber contract. is that how you read it?

  • hm? says:

    How much, do you suppose, is $410,848,162 million dollars?

  • Carlk says:

    Glad to see that Jim Crowe adding to the carbon footprint while firing up his jet is ending up paying dividends now and in the future.

    This is a favorable trend, as you allude to, Rob. “The trend seems finally our friend.” 🙂

  • Anonymous says:

    Hard to get giddy over an “indefinite delivery/indefinite quantity” contract. That’s like you coming home and telling your wife you sold telecom ramblings for up to $100m to CNET. When she asked you when the deal would close and how much you would get, you responded by saying, “I really don’t know…in fact, it can be much less than that and it may not happen it all.”

    I wouldn’t go tweaking that highly sophisticated financial model of yours based on this non-announcement announcement.

  • Carlk says:

    Anonymous, would it be fair to say that without knowing “the minimum” commitment tied to this contract, you are lying to your wife, possibly because you have a mistress on the side?

    My friends in the defense industry tell me that the “maintenance support” portion of this contract makes it more valuable than not.

  • Anonymous says:

    Carlk, i have no clue what point you’re trying to make. You obviously need to go back to school for a remedial class on metaphors, similes and analogies.

  • Carlk says:

    There is a MINIMUM value or commitment to this contract, is there not? You told your wife it may be nothing. You must be hiding the minimum commitment for your mistress assuming more lofty values–the maximum–fail at developing.

    All AHOLES bring an opinion to the table, yours as well as mine, since you took the liberty to attack me unnecessarily.

    Here’s the metaphor for that. An opinion is like an AHOLE, everyone has one. Discounting a one half billion contract to zero takes a lot of hubris.

    This is a better one to discount to zero:

    http://finance.yahoo.com/news/Defense-contractors-vie-FAA-rb-753617920.html?x=0

  • schmuckinsurance says:

    Carlk, I am with anon. I had no idea what you are talking about. I don’t say that in attack mode but maybe reflect on it as to how you can better get your point across b/c it seems like this is a topic where you have something to say.

  • Carlk says:

    Anon was attempting to discount this contract to zero without knowing the minimum contract commitment which may be sizable still. Whoever knows the minimum should speak with authority while others should STHU. Maybe company officials will one day lead us to that answer.

    I guess discounting every opportunity, known or unknown that LVLT has to zero is O.K. though, because that’s what the stock price reflects almost all of the time.

    http://en.wikipedia.org/wiki/IDIQ

    IDIQ contracts are most often used for service contracts and Architect-Engineering (A-E) services. Awards are usually for base years as well as option years. The Government places delivery orders (for supplies) or task orders (for services) against a basic contract for individual requirements. Minimum and maximum quantity limits are specified in the basic contract as either number of units (for supplies) or as dollar values (for services). The Government uses an IDIQ contract when it cannot predetermine, above a specified minimum, the precise quantities of supplies or services that the Government will require during the contract period.[1][2]

  • Anonymous says:

    Surely somewhere there is a government contracting historical average to compare actual IDIQ spends vs. announcements. We do very little government contracting but sure seems like these dollars do get spent. Just sayin…..

  • Carlk says:

    Anon told his wife the contract may be worth zero, knowing that the minimum commitment would be used to spend lavishly on his mistress first, because mistresses are so much more fun in his world view. 🙂 Anon can justify lying to this wife this way.

    That’s for attempting to insult my intelligence, Anonymous, you SOB! 🙂

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